St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1887-12-26
The PRIVATE BANKS.
Caustic Letter From a Banker in Reply
to Examiner Knox.
HE USES A SHARP KNIFE.
Emphatic Protests Against Some of the
Assertions Made by the Examiner
1.-The Bankers Position.

This is about the position in which
Examiner Knox leaves the private
bankers of Minnesota, in his interview
of the 18th inst, followed by his state
ment that he is friendly to them. The
whole tenor of his interview is to reflect
on the bankers, ami to cast them in dis
repute before the people; hence, it IS
thought best to review the situation and
to refute his statements.
He says that ''there are 119 firms
doing private banking business in
MinnesOta-none of them incorporated,
as one might. i'll most cases, infer from
the fanciful names they sail under;
that their lettcrheadS carry large
amount of capital. giving every appear
ance of a regularly incorporated con-
corn, thus securing TO themselves all
the benefits of incorporated concerns,
and yet evade its cost, taxation; that
the kellar law was passed to secure
taxation; that they (the banks give
one statement to the people and another
statement is then fixed up, with per-
haps One-tenth as much in deposit
this is for the assessor; these banks
return only One-half, One-third, one
actual deposits for taxation"
This is pretty strong Indictment,
and, if true, and in SO far as it is true,
the guilty ones are subject to just con-
demnatiOn; if not true, then what shall
TIE the Judgment imposed upon one who,
from bis official position, should and
does know the facts and yet so uniustly
accuses? There are but very small
number of the banks which are obnox-
louS to the charge of pretense in pub
fishing corporate names with pretended
corporate Offices.
AS rule the title of bank is accom-
panied by the name of the proprietor as
banker, so that no person can be misled
into ''inferring" that the institution is
anything but the private bank it claims
to be. The imputation that private
bankers pay less than their proportion
of taxes is unwarranted and untrue,
and Mr.. KnOX's assertion that bankers
pap taxes ION One-half, one-third, one
fifth or one-tenth of their deposits be-
trays a spirit neither candid nor manly,
and disposition to mislead the people.
He knows that under our statutes de-
pOSitS are treated as liabilities, and are
never taxed nor the subject of taxation
as against banks, whether incorporated
or otherwise. The party who deposits
lists and pays the taxes levied against
his deposits. The capital of the
private banker is represented by
whatever he Owns-his entire prop
erty IntereSts-so that if Mr.. Knox
meant by his expression capital" in
stead of deposits, his charge is just as
much at variance with the facts, and the
imputation just as grave. The private
banker is the medium of exchange for
the people in his locality, useful in his
way. He receives deposits, granting
reasonable returns, and loans to others
at usual rates, thus proving not only a
convenience, but necessary business
factor in the community. He puts no
more of his money into the business
than is required, and invests the bal
ance as he pleases, possibly in real
property-nOt so easily converted, it
may be, as If otherwise invested.
Now, if banker has property of the
value of $4,000 may he not so advertise,
and if it is assessed as other property
may not Mr.. Knox be open to the charge
of Misrepresentation or at least of say
ing what he does not know TO be true
when he says banker advertiseS S4O,-
600 and only returns $1,000.
But Mr.. Knox says: II stand for and
represent the state banking system, and
this law aims to protect them"
This assertion develops that Mr.
Knox was the author or instiga-
tor of the act, and also . its
purpose. Now let us just see what a
monumental record our friend has
erected for himself for the purpose indi-
Gated. The banker must sacrifice his
business insignia trademark, if you
please-by which only he is known to
the business world, and by which only
can he perpetuate his business. He
must incorporate compulsOrily, adding
at leSat two associates mot less than
three can incOrporate) to share in his
business venture; also, must convert
his investments into capital, even though
there be no business need for
it. To make this easy and the
burden light, the companion actr re-
duced the capitalization required to in
corporate from $4,000 to $4,000. accord
ing to the population, so that the banker
worth, say S150,000 - every dollar of
which stood sponsor for every Obliga-
ton to depOsitOr or other creditor
could now incorporate n the basis of
$4,000 by taking one-third; so that now,
instead of S150,000 to respond to call
from creditors, the law fixed the liabil-
ity at 0,000, or double the stock, thus
actually inviting peculatiOn and fraud
according to law" If Mr.. Knox, by
this enactment, stood for the banking
system, the query arises who stood for
the protection of the people against
them, except the bankers, who refused
to diScredit themselves by submitting to
this nefariOus act?
The law goes further. 1t undertakes
to deprive the citizen of his property
vested rights without due process of law
1t by construction nullifies the national
bank act, as national banks are not
subject to state supervision. They must
also take down their signs and drop
their corporate names. 1t is the very
first known attempt on the part of the
Legislative power to compel the aggre-
cation of capital and to enforce the con-
troll of the business affairs of the people
by corporations to the exclusion of in
dividaal enterprise -;-s~-.s g.. -
inspection and: supervision was not
the object sought by law, else the law
would have so provided and exempted
from its operation banks submitting to
inspection and report. 1t is deemed
most unjust and unwiSe Interference
with the business of the people without
any corresponding public advantage.
The bankers of Minnesota claim to be
reasonably horeSt and comparatively
reSpectable-not eminently So,of course,
being neither officehOlders nor as
pirants for official position. They
have organized an association inviting
ali the banks. corporate and otherwise,
to join them, hoping by conference to
induce and perfect business methods
for the best interests of themselves and
the people. Now we cordially invite
Examiner Knox to forego his threat ''tO
take another twist on you (us) fellows"
and join us in our association and DELHI
erations and assist US in the good work
we have undertaken. Don't offer
further bounty for our scalps, nor make
felons of US. for doing an honest bust
ness III an honest way. Respectfully,
Dec. "a, 1887. BANKEB.
TERRIBLE VENGEANCE.
.Iaal0uS Husband Has the Hand